GATT: Uruguay Round (Hansard, 14 January 1992)

§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Reay)
My Lords, the Director General of the GATT, Mr. Dunkel, issued a draft final agreement for the Uruguay Round of multilateral trade negotiations on 20th December. Following a meeting in Geneva yesterday at which parties gave their initial response to the text, there will now be further intensive negotiations. We hope that these will enable the round to be concluded very shortly. We believe that the final 115 agreement must be on terms close to Mr. Dunkel's text. Such an agreement would bring considerable benefits to the United Kingdom and to the world economy.

§ Lord Boyd-Carpenter
My Lords, is my noble friend aware that many people who have studied what has been happening on this round are deeply depressed by the unwillingness of some of our European friends to compromise in respect of agricultural support? Is he further aware of the fact that a failure of the round would have disastrous consequences for the economy of the world and almost certainly lead to another world recession?

§ Lord Reay
My Lords, I agree indeed that a successful conclusion would provide a substantial stimulus to the economy and that a failure would be disastrous for the world economy. It would risk a loss of faith in GATT and a slide back into protectionism and inward-looking trade blocs.
With regard to my noble friend's first question, it is only fair to say that most member states have difficulties with the agricultural text, including ourselves.

§ Baroness Seear
My Lords, is the noble Lord aware that we on these Benches most strongly support the determination to bring the Uruguay discussions to a successful conclusion? We entirely agree with the Government that few things could be more fatal for the future prosperity of the world, including this country, than the failure of the Uruguay Round.

§ Lord Reay
My Lords, I am most grateful to the noble Baroness for her support.

Lord Bruce of Donington
My Lords, is the noble Lord aware that the principal item in dispute, in particular between the United States and the European Community, relates to the quite unconscionable level of export subsidies, which are now a great burden on the United Kingdom population both in terms of price and of taxation? Will the noble Lord ensure that a message is sent to his right honourable friend the Prime Minister that the country expects a more heavyweight participation in those discussions in order to ensure that this ridiculous common agricultural provision is abolished in order that there can be agreement for the wider interest to which the noble Lord, Lord Boyd-Carpenter, referred?

§ Lord Reay
My Lords, the European Community will be seeking changes to redress imbalance in proposed reductions in different areas of agricultural support. Cuts in domestic support and in import protection and export subsidies need to be better balanced than they are in the Dunkel text. How that should be done is a matter for the negotiators. We do not think that the problems are insurmountable and they should not be allowed to stand in the way of an agreement.

§ Lord Marlesford
My Lords, does my noble friend agree that it takes two to tango and that we should regard the remarks on agriculture made by President 116 Bush in Kansas City in the context of his domestic political problems? We should not allow contemplation of the failure of the Uruguay Round purely in order to support European or American farmers. The real issues are much closer to those which President Bush went to Tokyo to discuss with the Japanese. We must move away from the narrow consideration of agriculture alone as regards the success or failure of the round.

§ Lord Reay
My Lords, President Bush's reported remarks in his speech in Kansas yesterday were made in the context of a strong plea for free and fair trade. He emphasised the need for a GATT agreement. As the President acknowledged, the United States too will have to make cuts in agricultural subsidies.

§ Lord Williams of Elvel
My Lords, is it not clear that intervention at the highest level is now required to get the Uruguay Round passed? As the noble Baroness, Lady Seear, said, it is essential that the discussions should be brought to a successful conclusion. Did not the Prime Minister say recently that he would be prepared to convene a meeting of the G7 countries in order to make sure that the Uruguay Round was passed? Has that request been made? When will the meeting take place?

§ Lord Reay
My Lords, we agree that an agreement should be reached. The European Commission is negotiating on behalf of the Community. However, we have been arguing strongly for an agreement close to the terms of Mr. Dunkel's text and have consistently urged the European Community to adopt a constructive attitude. Indeed, my right honourable friend the Prime Minister has continued to take a close personal interest in the progress of negotiations and has remained in contact with a number of other heads of government on the matter.

§ Lord Mackie of Benshie
My Lords, despite the universal enthusiasm for the conclusion of a successful GATT Round, I trust and hope that the Government are aware that the projected agreement initiated by Mr. MacSharry is grossly unfair to British agriculture and would result in penalising the most efficient sector of British agriculture. Will he say what progress has been made to modulate this unfortunate modulation?

§ Lord Reay
My Lords, we are trying to impress on all member states the importance of a GATT agreement covering all areas of the negotiations.